COMPETENT AUTOMOBILES CO. LTD.

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2 COMPETENT AUTOMOBILES CO. LTD. Board of Directors Mr. Raj Chopra Mrs. Kavita Ahuja Mr. K. K. Mehta Mr. S. L. Tandon Mr. Gopi Dargan Mr. R. C. Murada Mr. Rohit Gogia Mr. O. P. Tandon Company Secretary Mr. Yadvinder Goyal Regd. Office Competent House, F-14, Connaught Place New Delhi Chairman & Managing Director Whole Time Director Whole Time Director Director Director Director Director Director Auditors Dinesh Mehta & Co. New Delhi Bankers Vijaya Bank State Bank of India Showrooms Competent House, F-14, Connaught Place, New Delhi C S Complex, 15, Firoze Gandhi Marg, Lajpat Nagar-II, New Delhi A-24 & 25, Madhu Vihar, Rajapuri, New Delhi Plot No. 3, Gazipur, (East Delhi) Delhi , Shivaji Marg, New Delhi Khasra No. 11/5/1, Opp. Furniture Market, Phirni Road, South - West Distt., Najafgarh, New Delhi , Shivaji Marg, New Delhi (True Value) A-25, Sector-33/34, Infocity, Gurgaon, Haryana GF-12 & GF-16, Omaxe Plaza, Sohna Road, Gurgaon, Haryana NH 21, Chandigarh Manali Highway, P.O. Gutkar, Distt. Mandi, (H.P) Village Tikkar, Post Didwin, Hamirpur, (H.P) Gandhi Nagar Kullu, Distt. Kullu, Himachal Pradesh Vill. Bamta Near I.T.I. Bilaspur, Distt. Bilaspur, Himachal Pradesh Village Rainsary (Jhalera), Una-Amb Road, Distt. Una, Himachal Pradesh Workshops 895/C-8, Near Jain Mandir, Dada Bari, Mehrauli, New Delhi Plot No. 3, Gazipur, Delhi B-83, Maya Puri Industrial Area, Phase - 1, New Delhi A-25, Sector-33/34, Infocity, Gurgaon, Haryana NH 21, Chandigarh Manali Highway, P.O. Gutkar, Distt. Mandi, (H. P.) Village Tikkar, Post Didwin, Hamirpur, (H. P.) Village Rainsary (Jhalera), Una-Amb Road, Distt. Una, Himachal Pradesh Opp. S.S.B. Training Centre, Shamshi, Kullu, H.P. Share Transfer Agent M/s Skyline Financial Services (P) Limited D-153/A, 1st Floor, Okhla Industrial Area, Phase -I, New Delhi

3 ANNUAL REPORT & ACCOUNTS NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that the 28 th Annual General Meeting of the members of Competent Automobiles Co. Limited will be held at Plot No.-3, Gazipur, Delhi on Monday, the 29 th day of July, 2013 at 9.30 A.M. to transact the following business: ORDINARY BUSINESS 1. To receive, consider and adopt the audited Balance Sheet of the Company as at 31 st March, 2013 and the Profit & Loss Account for the year ended on that date together with reports of the Directors and the Auditors thereon. 2. To declare dividend on equity shares. 3. To appoint a director in place of Mr. R C Murada, who retires by rotation and being eligible offers himself for reappointment. 4. To appoint a director in place of Mr. S L Tandon, who retires by rotation and being eligible offers himself for reappointment. 5. To appoint Statutory Auditors and to fix their remuneration. Registered Office: Competent House, F-14, Connaught Place, New Delhi Place: New Delhi Date: 30 th May, 2013 By order of the Board For Competent Automobiles Co. Ltd. Sd/- Yadvinder Goyal Company Secretary NOTES: 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT AN- OTHER PERSON AS HIS/HER PROXY TO ATTEND AND VOTE ON A POLL INSTEAD OF HIMSELF/ HERSELF. THE PROXY NEED NOT TO BE A MEMBER OF THE COMPANY. A BLANK FORM OF PROXY IS ENCLOSED AND IF INTENDED TO BE USED, IT SHOULD BE DULY COMPLETED AND DEPOS- ITED AT THE REGISTERD OFFICE OF THE COMPANY NOT LESS THAN FORTY EIGHT HOURS BE- FORE THE SCHEDULED TIME OF THE MEETING. 2. Shareholders are requested to bring their copy of Annual Report to the meeting, as no separate copy would be provided at the venue of the Annual General Meeting. 3. In case of joint holders attending the meeting, only such joint holder who is higher in the order of names will be entitled to vote. 4. The Register of Members and Share Transfer Books of the Company will remain closed from Tuesday, the 23 rd July, 2013 to Monday, the 29 th July, 2013 (both days inclusive). 5. The dividend on equity shares as recommended by the Board of Directors, if declared at the Annual General Meeting, will be paid within the prescribed time after the Annual General Meeting. 6. Members, who are holding shares in identical order of names in more than one folio are requested to write to the Company enclosing their share certificates to consolidate their holdings in one folio. 7. Members who hold shares in dematerialised form are requested to bring their Client ID and DPID numbers for easy identification of attendance at the meeting. 8. The members holding shares in physical form are also requested to notify any change in their addresses immediately to the Company s Share Registrar and Transfer Agents i.e. M/s. Skyline Financial Services Pvt. Limited, D-153/A, 1st Floor, Okhla Industrial Area, Phase -I, New Delhi

4 COMPETENT AUTOMOBILES CO. LTD. 9. Members / Proxy holders are requested to produce at the entrance, enclosed attendance slip duly completed and signed. 10. In order to provide protection against fraudulent encashment of the warrants, shareholders holding shares in physical form are requested to intimate the Company under the signature of the Sole/First joint holder, the following information to be incorporated on the Dividend Warrants: i. Name of the Sole / First joint holder and the Folio Number. ii. Particulars of Bank Account, viz.: - Account type, whether Savings (SB) or Current Account (CA) - Account number allotted by the Bank. - Name of the Bank - Name of Branch - Complete address of the bank with Pin Code Number 11. Shareholders holding Shares in electronic form may kindly note that their Bank account details as furnished by their depositories to the Company will be used for payment by ECS or printed on their Dividend Warrants as per the applicable regulations. The Company will not entertain any direct request from such shareholders for deletion of / change in such Bank details. Further, instructions, if any, already given by them in respect of shares held in physical form will not be automatically applicable to shares held in electronic mode. Shareholders who wish to change such Bank Account details are therefore requested to advise their Depository Participants about such changes, with complete details of Bank Account. 12. Electronic Clearing Service (ECS) Facility With respect to the payment of dividend, the Company provides the facility of ECS to all of its shareholders, holding shares in electronic form and shareholders who have opted for ECS and are holding shares in physical forms. Shareholders holding shares in the physical form and who wish to avail ECS facility, may authorize the Company with their ECS Mandate in the prescribed form, which is enclosed herewith or can be downloaded from Company s website (i.e. Requests for payment of dividend through ECS for the year should be lodged with M/s Skyline Financial Services Pvt. Limited. 13. Pursuant to provisions of Section 205A of the Companies Act, 1956, all unpaid or unclaimed dividends upto the year ended 31st March, 2005 have been transferred to Investor Education and Protection Fund (IEPF) established by the Central Government. 14. Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, dividend for the financial year ended March 31, 2006 and thereafter, which remains unclaimed for a period of 7 years will be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government pursuant to Section 205 of the Companies Act, Information in respect of such unclaimed dividend when due for transfer to the fund is given below: Financial Year Type of dividend Date of Declaration Date at which of Dividend amount becoming due for credit to IEP Fund Final Dividend Final Dividend Final Dividend Final Dividend Final Dividend Final Dividend Final Dividend Shareholders who have not so far encashed the dividend warrant(s) are requested to seek issue of duplicate warrant(s) by 3

5 ANNUAL REPORT & ACCOUNTS writing to the Company. Shareholders are requested to note that no claims shall lie against the Company or the said fund in respect of any amounts which were unclaimed and unpaid for a period of seven years from the dates that they first became due for payment and no payment shall be made in respect of any such claims. 15. Non-Resident Indian Shareholders are requested to inform M/s Skyline Financial Services Pvt. Limited immediately: - The change in the residential status on return to India for permanent settlement. - The particulars of the Bank Account maintained in India with complete name, branch, account type, account number and address of the Bank, if not furnished earlier. 16. As mandated by the Securities and Exchange Board of India (SEBI), members are requested to send copy of the PAN card along with other documents while sending their request for transfer of shares in physical form, deletion of name of the deceased shareholders, transmission or transposition of shares etc., to the Registrar & Share Transfer Agent of the Company. 17. Consequent upon the introduction of Section 109A of the Companies Act, 1956, shareholders are entitled to make nomination in respect of shares held by them in physical form. Shareholders desirous of making nominations are requested to send their requests in Form 2B, which is enclosed herewith, to the Registrar and Share Transfer Agents i.e. M/s Skyline Financial Services Pvt. Limited. 18. Pursuant to the requirements of the listing agreement with the stock exchange, on Corporate Governance, the information required to be given, in case of the appointment of a new director or re-appointment of a director, is given in Annexure to the Corporate Governance Report on Page No. 16. Registered Office: Competent House, F-14, Connaught Place, New Delhi Place: New Delhi Date: 30 th May, 2013 By order of the Board For Competent Automobiles Co. Ltd. Sd/- Yadvinder Goyal Company Secretary 4

6 COMPETENT AUTOMOBILES CO. LTD. DIRECTORS REPORT Dear Members, Your directors have pleasure in presenting this 28 th Annual Report together with Audited Accounts of the Company for the financial year ended 31 st March, FINANCIAL HIGHLIGHTS The financial performance of the Company, for the year ended 31 st March, 2013 is summarised below: (Rs. in Lacs) Particulars Year ended Year ended Gross Income 80, , Profit before Dep. & Tax 1, , Less : Depreciation Less :Provision for Taxation including deferred tax Profit after tax Add: Profits from Previous year 2, , Profits available for appropriation 3, , Less Appropriations Proposed Dividend including tax Tax Adjustments Transfer to General Reserves Closing Balance 3, , OPERATIONAL AND FINANCIAL PERFORMANCE was a tough year. Besides slowing down of economy, factors such as tight liquidity and generally weak sentiments led to reduced consumption. Demand growth in your Company s product also slowed down in thus limiting top line development. In this challenging environment, the company kept its focus on improving operational efficiencies to remain competitive in existing business. Your Company has reported a turnover of Rs lacs in the year under review against the turnover of Rs lacs in the previous year. The Company s profit before tax (PBT) is Rs lacs as compared to profit before tax of Rs lacs of previous year. During the year , your company sold 17,233 Maruti Vehicles (including 200 Vehicles under Direct Billing) as compared with 17,655 Maruti Vehicles (including 721 Vehicles under Direct Billing), sold during the previous year. DIVIDEND Keeping in view the current economic scenario and the future fund requirements of the Company, your directors are pleased to recommend a final dividend of Re.1.00 per Equity Share of Rs. 10/- each for the year ended 31 st March, 2013, which if approved by shareholders at the forthcoming Annual General Meeting will be paid to those shareholders whose names appear on the Register of Members as on book closure dates. ACHIEVEMENTS Since the last directors report, your Company has received an award for Best Performance in Corporate Sales Category- A from Maruti Suzuki India Limited. 5

7 ANNUAL REPORT & ACCOUNTS DIRECTORS In accordance with the provisions of Articles of Association of the Company, Mr. R C Murada and Mr. S L Tandon, directors of the Company, retire by rotation and being eligible offer themselves for re-appointment at the forthcoming Annual General Meeting. DIRECTORS RESPONSIBILITY STATEMENT In terms of Section 217(2AA) of the Companies Act, 1956, the Board of Directors confirm that: a) In the preparation of the Annual Accounts for financial year ended 31 st March, 2013, the applicable accounting standards have been followed along with proper explanations relating to material departures; b) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31 st March, 2013 and of the profit for the year ended on that date; c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities. d) They have prepared the annual accounts for financial year ended 31 st March, 2013 on a going concern basis. CORPORATE GOVERNANCE Your Company reaffirms its commitment to good Corporate Governance practices. Pursuant to Clause 49 of the Listing Agreement with the BSE Limited. Corporate Governance Report and Auditors Certificate regarding compliance of conditions of Corporate Governance are enclosed and form an integral part of this report. MANAGEMENT DISCUSSION & ANALYSIS REPORT A report on Management Discussion and Analysis, as required under Clause 49 of the Listing Agreement, is enclosed and forms an integral part of this report. LISTING FEE OF SHARES Your Company s Equity Shares are listed with BSE Limited (BSE) and Listing Fee for the financial year has been paid in advance by the Company. AUDITORS The Statutory Auditors, M/s Dinesh Mehta & Co., Chartered Accountants, retire at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. Your Company has received a Certificate from the Auditors to the effect that their appointment, if made, would be within the limits of Section 224(1B) of the Companies Act, AUDITORS REPORT The observations made by the Auditors in their Report are self-explanatory and do not call for any further comments. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Since your Company does not own any manufacturing facility, the requirements pertaining to disclosure of particulars relating to conservation of energy, research & development and technology absorption, as prescribed under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable. The foreign exchange earnings and expenditure of the Company during the year under review were Rs. NIL and Rs lacs as compared to Rs. NIL and Rs lacs in the previous year respectively. 6

8 COMPETENT AUTOMOBILES CO. LTD. PARTICULARS OF EMPLOYEES During the year, there was no employee drawing remuneration in excess of Rs. 60,00,000/- p.a. or Rs. 5,00,000/- p.m. Accordingly, information required to be given pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 has not been given here. DEPOSITS Your Company has not accepted any deposit under Section 58A and 58AA of the Companies Act, 1956, read with Companies (Acceptance of Deposits) Rules, ACKNOWLEDGEMENT The Board wishes to place on record its appreciation to the contribution made by the employees of the Company during the year under review. Your Directors thank the customers, clients, vendors and other business associates for their continued support in the Company s growth. The Directors also wish to thank the Government Authorities, Banks, Financial Institutions and Shareholders for their cooperation and assistance extended to the Company. For and on behalf of the Board For Competent Automobiles Co. Limited Sd/- RAJ CHOPRA Date: 30 th May, 2013 Chairman & Managing Director Place: New Delhi DIN

9 ANNUAL REPORT & ACCOUNTS CORPORATE GOVERNANCE REPORT COMPANY S PHILOSOPHY The Company maintains standards while complying with the ideology of practicing good Corporate Governance. While achieving corporate goals and creating wealth for the investors the company simultaneously endeavors to apply highest level of corporate ethics and corporate governance practices. The Board considers itself a trustee of all shareholders and acknowledges its responsibilities to the shareholders for creating and safeguarding shareholders wealth. The Company s compliance of corporate governance guidelines of the listing agreement is as follows: A. COMPOSITION OF THE BOARD AND RECORD OF OTHER DIRECTORSHIPS HELD The Company is managed and controlled through a professional body of Board of Directors, which consists of eminent persons with considerable professional expertise and experience. The Board of Directors comprise of an optimum combination of Executive and Non-executive Independent directors headed by the Chairman. The composition of the Board of Directors of the Company is in conformity with the provisions of clause 49 of the listing agreement with the stock exchange. The independent directors do not have any pecuniary relationship or transactions with the company, promoters and management, which may affect independence or judgment of the directors in any manner. The composition and structure of the Board and record of other directorships and Committee memberships and Chairmanships of directors as on 31 st March, 2013 is as under: Name of the Category Designation Inter-se No. of other Total No. of Chairmanships / Director relationship Director Memberships of Board among ships Committees*** directors Held** Chairman- Member- Total ship ship Mr. Raj Chopra Promoter Chairman & Father of 8 Nil Nil Nil Director Managing Mrs. Kavita Director Ahuja Mrs. Kavita Ahuja Promoter Whole-Time Daughter of 1 Nil 1 1 Director Director Mr. Raj Chopra Mr. K. K. Mehta Executive Whole-Time Brother-in- Nil Nil Nil Nil Director Director law of Mr. Raj Chopra Mr. S. L. Tandon Independent Director * Nil Nil Nil Nil Director Mr. Gopi Dargan Independent Director * 2 Nil 1 1 Director Mr. R. C. Murada Independent Director * 2 2 Nil 2 Director Mr. Rohit Gogia Independent Director * 2 Nil 2 2 Director Mr. O P Tandon# Non Executive Director * Nil Nil Nil Nil and Non- Independent Director *There is no relationship between any of the Independent Directors ** Excluding directorship of Competent Automobiles Co. Ltd. *** In accordance with clause 49, Membership(s) / Chairmanship(s) of only the Audit Committee and Shareholder /Investor Grievance Committee of all Public Limited Companies, whether listed or not, have been considered. As per disclosure(s) received from the Directors, none of the Directors hold memberships in more than 10 Committees or Chairmanship in more than 5 Committees. # Mr. O P Tandon was appointed as an additional director of the company w.e.f and subsequently appoited as director of the Company by shareholders at previous AGM of the Company held on

10 COMPETENT AUTOMOBILES CO. LTD. B. BOARD MEETINGS: 1. Schedule of Board Meetings Months for holding the board meetings in the ensuing year are decided in advance and most board meetings are held at the Company s registered office at Competent House, F-14, Connaught Place, New Delhi. The Board meets at least once in a quarter to review the quarterly results and other items on the agenda. 2. Number of Board Meetings The Company s Board met six (6) times on 11 th May, 2012, 14 th August, 2012, 29 th August, 2012, 12 th November, 2012, 28 th January, 2013 and 13 th February, 2013 during the financial year ended 31 st March, The maximum time gap between any two meetings was not more than four months. 3. Record of the Directors attendance at Board Meetings and Annual General Meeting (AGM) Name of the Director Number of Board Meetings Attendance at last AGM held during his/her tenure held on 29 th September, 2012 attended by him/her Held Attended Mr. Raj Chopra 6 6 Yes Mrs. Kavita Ahuja 6 6 Yes Mr. K K Mehta 6 6 No Mr. S. L. Tandon 6 6 Yes Mr. Gopi Dargan 6 6 No Mr. R. C. Murada 6 6 Yes Mr. Rohit Gogia 6 6 No Mr. O P Tandon 5 5 No C. BOARD LEVEL COMMITTEES In accordance with listing agreement with the stock exchange on Corporate Governance, the following committees are in operation: Audit Committee Investor Grievance Committee 1. AUDIT COMMITEE Terms of reference As a measure of good Corporate Governance and to provide assistance to the Board of Directors in fulfilling the Board s supervisory responsibilities, an Audit Committee has been constituted, headed by an independent director. Majority of its members are Independent Directors and each member has rich experience in financial sector. The functions of the Audit Committee are review of periodical results and annual financial statements. The Audit Committee also oversees the Company s financial reporting process, review performance of statutory and internal auditors, adequacy and compliance of internal control systems. The Audit Committee reviews quarterly, half yearly and annual financial statements before submission to the Board, focusing primarily on changes, if any, in accounting policies and practices, compliance with accounting standards, compliance with stock exchange listing agreement requirements etc. Composition and names of members The Audit Committee, as on 31 st March, 2013, consists of the following three directors and each member of the Committee possesses a strong financial and accounting background: Chairman : Mr. R. C. Murada Members : Mr. Rohit Gogia and Mrs. Kavita Ahuja 9

11 ANNUAL REPORT & ACCOUNTS Meetings and attendance during the year The Audit Committee met five times during the financial year from 1 st April, 2012 to 31 st March, 2013 on the following dates: 1 11 th May, th November, th August, th February, th August, 2012 The attendance record of the audit committee members is given in following table: Names of the Number of Audit Committee meetings held during Audit Committee Members his/her tenure and attended by him/her Held Attended Mr. R. C. Murada 5 5 Mrs. Kavita Ahuja 5 5 Mr. Rohit Gogia 5 5 Mr. R. C. Murada, Chairman of the Audit Committee attended the last annual general meeting of the Company to answer the shareholders queries. 2. INVESTORS GRIEVANCE COMMITTEE (IGC) Terms of reference This Committee was constituted specifically to review compliance of rules and regulations, to redress shareholder s grievance and to provide suggestions. To expedite the process of share transfer, transmission etc., the Board has appointed M/s Skyline Financial Services Pvt. Ltd viz. Registrar and Share Transfer Agent to attend to all the necessary formalities of share transfer, transmission etc. at least thrice in a month. Terms of reference of the Investor Grievance Committee are as per the guidelines set out in the listing agreement with the Stock Exchange which inter-alia include looking into the investors complaints on transfer of shares, non receipt of dividends etc. and redressal thereof. Composition and names of members The Investor Grievance Committee (i.e. IGC) as on 31 st March, 2013 is headed by an Independent director, and consists of the following three directors: Chairman : Mr. R. C. Murada Members : Mr. Rohit Gogia and Mr. Gopi Dargan Meetings and attendance during the year The Investor Grievance Committee met four (4) times during the financial year from 1 st April, 2012 to 31 st March, 2013 on the following dates: 1 11 th May, th November, th August, th February, 2013 The attendance record of the Investor Grievance Committee members is as follows: Names of the IGC Number of IGC meetings held during his tenure and attended by him members Held Attended Mr. R. C. Murada 4 4 Mr. Gopi Dargan 4 4 Mr. Rohit Gogia 4 4 Compliance Officer The Compliance Officer for this committee is Mr. Yadvinder Goyal, Company Secretary of the Company. 10

12 COMPETENT AUTOMOBILES CO. LTD. Shareholders Complaints etc. received during the FY During the year from 1 st April, 2012 to 31 st March, 2013 the Company has received one complaint from Investor / Shareholder of the Company in the last week of March, The same was resolved within 1 st week of April, All requests received for change of address/ change of bank account details, dividend related queries etc. were replied well with in time. However, as informed above, as at 31 st March, 2013, one complaint was pending for redressal. REMUNERATION PAID TO DIRECTORS The remuneration paid to Managing and Whole time directors is decided by the Board of Directors with the approval of shareholders of the Company subject to provisions of section 198, 309, 349 & 350, Schedule XIII and all other applicable provisions of the Companies Act, Following table give the details of remuneration paid to directors. As of now, the Company does not have any Employee Stock Option Plan (ESOP):- The Details of Remuneration paid to Directors for the year ended 31 st March, 2013 (In Rs.) Name of Director Remuneration Commission Total Mr. Raj Chopra 18,00,000 30,00,000 48,00,000 Mrs. Kavita Ahuja 11,00,000-11,00,000 Mr. K. K. Mehta 7,20,000-7,20,000 D. GENERAL BODY MEETINGS: 1. Date, Venue and Time of previous three Annual General Meetings: Financial Year ended Date Venue Time March 31, Plot No. 3, Gazipur, Delhi :00 a.m. March 31, Plot No. 3, Gazipur, Delhi :00 a.m. March 31, Plot No. 3, Gazipur, Delhi :00 a.m. 2. Details of special resolutions passed in the previous three Annual General Meetings : No Special Resolution was proposed or passed in the previous three Annual General Meetings of the Company. 3. No Special Resolution requiring a postal ballot was placed before the last Annual General Meeting. No special resolution requiring postal ballot is being proposed at the forthcoming Annual General Meeting. E. DISCLOSURES: 1. Related Party Transactions: For related party transactions please refer to note no. 36 in the notes to financial statement forming part of the annual accounts on page No. 39 & The Company has complied with the requirements of stock exchange or SEBI on matters related to Capital Markets, as applicable. No penalty was levied by these authorities in last three years. 3. Code of Conduct: The Company has adopted a Code of Conduct for the members of the Board of Directors and the senior management of the Company. The code of conduct is displayed on the website of the Company. To The Board of Directors Competent Automobiles Co. Ltd., Competent House, F-14, Connaught Place, New Delhi Annual Declaration of compliance of Code of Conduct by CEO I, Raj Chopra, Chairman & Managing Director, hereby declare that the Code of Conduct adopted by the Company for its Board members and senior management personnel has been duly complied by all Board members and senior management personnel of the Company for the year ended 31 st March, Sd/- New Delhi Raj Chopra 30 th May, 2013 Chairman & Managing Director 11

13 ANNUAL REPORT & ACCOUNTS Compliance with Mandatory requirements of clause 49 of the listing agreement The Company has complied with all the applicable mandatory requirements of clause 49 of the listing agreement. 5. Compliance with Non-Mandatory requirements of clause 49 of the listing agreement The Company has not adopted any of the non-mandatory requirements of clause 49 of the listing agreement. 6. The necessary certificate from Mr. Raj Chopra, Chairman and Managing Director and Mr. Vijay Sharma, DGM- Finance & Accounts of the Company, pursuant to clause 49(V) of the listing agreement with stock exchange, was placed before the Board. 7. Management Discussion and Analysis Report - The Management Discussion and Analysis has been discussed in detail separately in this Annual Report on page no Disclosure regarding appointment or re-appointment of directors: a) Mr. S L Tandon and Mr. R C Murada, directors of the Company, retire by rotation and being eligible offer themselves for reappointment at the forthcoming Annual General Meeting; Pursuant to the requirements of the listing agreement with the stock exchange, on Corporate Governance, the information required to be given, in case of the appointment of a new director or re-appointment of a director, is enclosed to this report on page No Compliance Certificate from Statutory Auditors: Certificate from Statutory Auditors confirming compliance with conditions of corporate governance as stipulated in clause 49 of the listing agreement, is annexed to this report. 10. Shareholding of Directors: As on 31 st March, 2013, details of shareholding of all the directors (i.e. Executive as well as Non-Executive Directors) are given below: i. Executive Directors: Name of the Director Number of Shares Held Mr. Raj Chopra Nil Mrs. Kavita Ahuja 37,78,680 Mr. K K Mehta Nil ii. Non - Executive Directors: F Name of the Director Number of Shares Held Mr. S. L. Tandon Nil Mr. Gopi Dargan Nil Mr. R. C. Murada Nil Mr. Rohit Gogia 15,000 Mr. O P Tandon Other disclosures as required under clause 49 has been given at relevant places in the Annual Report. MEANS OF COMMUNICATION The Company normally publishes its quarterly / half yearly / yearly Unaudited/audited financial results in Business Standard / Financial Express / Jansatta (English & Hindi) newspapers. The Company also ensures that these Results are promptly and prominently displayed on the Company s website 12

14 COMPETENT AUTOMOBILES CO. LTD. G. INFORMATION TO SHAREHOLDERS 1. REGISTERED OFFICE Competent House, F-14, Connaught Place, New Delhi Phone: , Fax : ANNUAL GENERAL MEETING The date, time & venue of the forthcoming Annual General Meeting and the Book Closure dates are as per the Notice calling the Annual General Meeting. 3. FINANCIAL CALENDAR Financial Year starts from 1 st April and ends at 31 st March of succeeding year and tentative schedule for approval of the quarterly / half yearly / yearly financial results is given below: Particulars Month (Tentative and subject to change) Un-audited Financial results for the 1 st quarter ending June 30, 2013 August, 2013 Un-audited Financial results for the 2 nd quarter and half year ending September 30, 2013 November, 2013 Un-audited Financial results for the 3 rd quarter ending December 31, 2013 February, 2014 Audited Financial results for the last quarter and whole year ending March 31, 2014 May, WEBSITE The address of the Company s website is 5. DIVIDEND PAYMENT DATE Your Directors have recommended a dividend of Re. 1/- per equity share. The total amount to be paid to equity shareholders as dividend is Rs Lacs. Dividend on equity shares as recommended by the Board of directors for the year ended 31 st March, 2013, if approved at the forthcoming Annual General Meeting, will be paid with in the specified time period. Following table gives the dividend history of Company in the last three years: Year Dividend (%) LISTING ON STOCK EXCHANGE As on 31 st March, 2013, the Company s shares are listed on BSE Limited and Scrip Code is INTERNATIONAL SECURITIES IDENTIFICATION NUMBER (ISIN) ISIN is a unique identification number of traded scrip. This number has to be quoted in each transaction relating to the dematerialised equity shares of the company. The ISIN number of the shares of Competent Automobile Co. Ltd. is INE823B ANNUAL LISTING FEE Annual Listing Fee for the financial year has been paid to the BSE Limited in advance. There are no arrears of listing fees with the said stock exchange till date. 13

15 ANNUAL REPORT & ACCOUNTS DISTRIBUTION OF SHAREHOLDING AS ON 31 ST MARCH, 2013 Following tables give the data on shareholding according to types of shareholders and class of shareholders. Distribution of the shareholdings according to type of shareholders Particulars 31 st March, 2013 No. of Shares % (Holding) Promoter and Promoter Group Individuals 46,04, Total (A) 46,04, Public Shareholding Mutual Funds Bodies Corporate 3,98, Individuals 11,10, Others (NRIs/HUF/Clearing Member / House etc.) 32, Total (B) 15,41, Grand Total (C=A+B) 61,46, Distribution of shareholding according to the number of shares No. of Equity Shares held 31 st March, 2013 No. of % of No. of % of Shareholders Shareholders Shares Share Capital Upto ,37, , , , , , ,04, and above ,30, TOTAL 2, ,46, MARKET PRICE DATA Monthly high and low prices of equity shares of the Company traded at the BSE Limited during financial year are given below: Month BSE High (Rs.) Low (Rs.) April, May, June, July, Aug, Sept, Month BSE High (Rs.) Low (Rs.) Oct, Nov, Dec, Jan, Feb, Mar,

16 COMPETENT AUTOMOBILES CO. LTD. 11. SHARE PERFORMANCE IN COMPARISON TO BSE SENSEX a. COMPANY S SHARE PRICE (MONTHLY CLOSING PRICE) MOVEMENT VIS A VIS BSE SENSEX 12. DEMAT Your Company s equity shares are compulsorily traded in dematerialisation form by all categories of investors. Equity shares of your Company are available for trading in the depository systems of both the Depositories viz. National Securities Depositories Limited (NSDL) and Central Depositories Service (India) Limited (CDSL). As on 31 st March, 2013, % (i.e. 55,05,314 equity shares) of the total paid-up equity share capital of the Company were held in demat form. 13. REGISTRAR AND SHARE TRANSFER AGENT AND SHARE TRANSFER SYSTEM The Company has appointed a common Registrar & Share Transfer Agent i.e. Skyline Financial Services Private Limited for share transfer and dematerialisation of shares. To expedite the process of share transfer, transmission etc., the Board has appointed M/s Skyline Financial Services Pvt. Ltd viz. Registrar and Share Transfer Agent to attend to all the necessary formalities of share transfer, transmission etc. at least thrice in a month. Their contact details are as follows: Skyline Financial Services Private Limited Unit: M/s Competent Automobiles Co. Limited D-153/A, 1 st Floor, Okhla Industrial Area, Phase-I, New Delhi Ph: Fax: Contact Person: Mr. Virender Rana / Mr. Ashok Saraswat admin@skylinerta.com 14. OUTSTANDING STOCK OPTIONS There are no outstanding GDRs / ADRs / Warrants / Convertible Instruments as on 31 st March, PLANT LOCATIONS The addresses of the Company s units are mentioned at the first page of this Annual Report. 16. ADDRESS FOR CORRESPONDENCE: i. Investors Correspondence may be addressed to the following: The Company Secretary, Competent Automobiles Co. Limited, Competent House, F-14, Connaught Place, New Delhi cs@competent-maruti.com OR to the Registrar and Share Transfer Agent i.e : Skyline Financial Services Private Limited as stated at point no

17 ANNUAL REPORT & ACCOUNTS PURSUANT TO THE REQUIREMENTS OF THE LISTING AGREEMENT WITH THE STOCK EXCHANGE, ON CORPORATE GOVERNANCE, THE INFORMATION REQUIRED TO BE GIVEN, IN CASE OF THE APPOINTMENT OF A NEW DIRECTOR OR RE-APPOINTMENT OF A DIRECTOR, IS GIVEN AS FOLLOWS: Name of the Director Mr. R C Murada Mr. S L Tandon Date of Birth 11/08/ /02/1930 Qualification B.A. B.Sc Diploma in Marketing from NSIC, Delhi Diploma in PCC (Personal Contract Campaign) from Times of India Diploma in Times Management from Times Education Expertise in Specific Mr. Murada has expertise in fields of sales and Group Captain S L Tandon is a functional area marketing. He has more than three decades of experience in the Print Media and Newspaper industry. He has worked at many senior positions in big corporate such as Times of India, Amar Ujala and Reliance Group (The Observer) and has played important roles thereat. retired Indian Air Force Officer. He has immense experience of more than two decades in the Technical (Automobile) field. Date of Appointment 02/11/ /04/2005 Name of the other M/s Competent Hotels Pvt. Limited NIL Companies in which M/s Competent Films Pvt. Ltd. he holds Directorship Name of the Competent Automobiles Co. Ltd. NIL Committees* of the Audit Committee- Chairman Companies of which Investor Grievance Committee Chairman he holds Membership / Chairmanship Shareholding in NIL NIL the Company * For this purpose, Membership(s) / Chairmanship(s) of only the Audit Committee and Shareholder / Investor Grievance Committee of all Public Limited Companies have been considered. 16

18 COMPETENT AUTOMOBILES CO. LTD. AUDITORS CERTIFICATE AS PER CLAUSE 49 OF THE LISTING AGREEMENT To the Members of M/s Competent Automobiles Co. Limited We have examined the compliance of conditions of corporate governance by Competent Automobiles Co. Limited for the year ended on 31 st March 2013 as stipulated in clause 49 of the listing agreement of the said Company with BSE Limited. The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of corporate governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. We state that no investor grievance(s) is / are pending for a period exceeding one month against the Company as per the records maintained by the Investors Grievance Committee. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. For Dinesh Mehta & Co., Firm Registration No N Chartered Accountants In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of corporate governance as stipulated in clause 49 of the above mentioned listing agreement. Sd/- Hiren Mehta Place: New Delhi Partner Date: Membership No

19 ANNUAL REPORT & ACCOUNTS MANAGEMENT DISCUSSION AND ANALYSIS REPORT OVERALL VIEW Year began with slow economic growth of India because of a tight monetary policy, intended to address persistent inflation, and a decline in investment caused by investor pessimism about domestic economic reforms and about the global situation. The economic environment was tough and the growth in India moderated for a year. There were various internal and external factors that played a role. High international crude prices have exacerbated the government s fuel subsidy expenditures, contributing to a higher fiscal deficit and a worsening current account deficit. The effect of the uncertainty and recession trends in the global economies was compounded by the complexities in the domestic environment. The economic sentiment remained subdued as government policy and measures were keenly watched for their impact on fiscal deficit and interest rates. The Indian automotive industry has emerged as a sunrise sector in the Indian economy. India is emerging as one of the world s fastest growing passenger car markets. After a slump during the economic crisis of , Automobile Industry had a dream run for the next two years. But, stubborn inflation, rising finance and fuel costs and a slowdown in industrial activity have taken a toll on domestic automobile sales since then. In the immediate term these are areas of serious concern but despite that the general consensus remains optimistic about medium and long term growth. Faced by slowdown in growth and risk of credit down rating, the Government of India announced some reforms over the last few months to revive investments and sentiments. These reforms though are unlikely to lead to the sharp economic recovery in short term but will have positive effect in medium and long term. INDUSTRY OVERVIEW, STRUCTURE AND DEVELOPMENT The automobile sector is one of the key segments of the economy having extensive forward and backward linkages with other key segments of the economy. The Indian automobile industry comprises of a number of Indian-origin and multinational players, with varying degree of presence in different segments. Automobile dealer Industry plays the vital role of link between the manufacturer of the automobile and the consumer. With large inventories of cars, dealers provide consumers with a wide array of vehicles to meet their needs at different price points. The sales of most of automobiles today are subject to changing consumer tastes, the popularity of the manufacturer s vehicle models, and the intensity of competition with other dealers. Along with the sale of the car, most dealers also sell additional automobile-related services to potential buyers. These services include extended warranties, undercoating, insurance and financing. After market sales departments sell these services and other merchandise after vehicle salespersons have closed a deal. Sales of these packages greatly increase the revenue generated for each vehicle sold. Because sales of automobiles fluctuate significantly, automotive dealers offer generous incentives, rebates and financing deals during slow periods to maintain high sales volumes and to reduce inventories. Performing repair work on vehicles is another profitable service provided in this industry. Service departments at motor vehicle dealers provide repair services and sell accessories and replacement parts. Although most service departments perform repairs only, some dealers also have body shops to do collision repair, refinishing and painting. The work of the service department has a major influence on customers satisfaction and willingness to purchase future vehicles from the dealer. Industry Structure: The automobile dealer industry is comprised of two segments. New car dealers, often called franchised dealers, primarily sell new cars, sport utility vehicles (SUVs) and passenger and cargo vans. These franchised dealers sell vehicles manufactured by a particular company, which may include several brands. Used car dealers comprise the other segment of the industry and are sometimes referred to as independent dealers. These dealers sell a variety of vehicles that have been previously owned or formerly rented and leased. Improvements in technology have increased the durability and longevity of new cars, raising the number of high-quality used cars that are available for sale. Used car dealers by definition do not sell new cars, but most new car dealers do sell some used cars. New vehicle sales account for more than half of total sales revenue at franchised new car dealers. These sales also generate additional revenue in other departments of new car dealers, which are more profitable to the dealer. By putting new vehicles on the road, dealers can count on new repair and service customers and future trade-ins of used vehicles. 18

20 COMPETENT AUTOMOBILES CO. LTD. Developments Prior to liberalisation of Indian Economy there were only three players in the Automobile Industry and Maruti was dominating the numbers by a fair margin. Cars were on the waiting list as the Demand far exceeded the Supply and choice was limited for the customers. Liberalisation of the Indian economy in 1991 had put the Indian automobile industry on a new growth trajectory. It attracted international giants to set up their production facilities in the country. In the present times, we have almost all major manufacturers of the world here in India and the numbers are only increasing. Customers are spoilt for choice and dealerships are willing to go that extra mile to make that ever so crucial sale. From a seller s market it has turned into a buyers market. Today, India has one of the fastest growing automobile industries in the world. In an effort to achieve greater financial and operational efficiency and flexibility in the automobile dealer industry, greater emphasis is being placed on after sale services, such as financing and vehicle maintenance and repair, at both new and used car dealers. These services remain less susceptible to economic downturns. They are also part of an effort to enhance customer loyalty and overall customer service. In recent years, the sale of used cars has become another useful business area for many new car dealers in the wake of shrinking margins on new cars. To make them acceptable to more customers, some dealers promote certified pre-owned vehicles to customers who want a warranty on their used vehicle. This often raises the price, but in return provides customers with peace of mind. In economic downturns, the relative demand for these and other used cars often increases as sales of new cars decline. The increased use of the Internet to market, new and used cars has also had a significant impact on automobile dealers. Through the Internet, consumers can easily access vehicle reviews, view pictures of vehicles and compare models, features and prices. Many websites allow consumers to research insurance, financing, leasing and warranty options. As a result, consumers are generally better informed and spend less time meeting with salespersons. OPPORTUNITIES AND THREATS Opportunities Over the last few months, Indian Government has taken some measures to stabilise the economy by containing fiscal and current account deficit. These stability measures will ensure that economic growth will slowly yet steadily return. We thus expect year to be a year of economic stability with growth at higher rates may return in the years coming afterwards. One of the largest automobile markets in the world, India has some remarkable facts to credit which make it world renowned. The Indian automobile industry has a bright future because of several factors like rapid urbanisation, Car buyers getting younger, growing middle class, overall growth of other industries, infrastructure development and the improved road infrastructure. This along with rising disposable income, aspirations for a better lifestyle and a slew of new product launches lined up by companies would aid overall increase in sales volumes. The Company, with its wide portfolio is expected to benefit from the same. This growing consumerism is expected to lead to an increase in car penetration. Further, there has been continuing shift in rural spending in terms of its growth and it is less dependent on farm income. Income remittances from migrant rural population, increase in land prices and increase in non-farm activities and increased government spending in rural areas, have helped to reduce rural under- employment and raised rural income levels. This indicates a potential growth opportunity in this market. The Company is poised to benefit from the same. Threats In developed markets, engine capacity and wheel base are the basis of segmentation of passenger cars, price does play a role but only upto a point. Since affordability is the most important demand driver in India, the domestic car market has until now been segmented on the basis of vehicle price. Price based competition also takes place in a continuum than in segments since nearly all the models are launched in multiple versions at different price points. As a result higher end variant compete with lower-end-variant of a car in a segment above it. Further, intensity of competition has increased in almost all the segments of the Indian automobile dealers market whether it s a competition for sales of cars from dealers of same brand or of competing brands or competition in after-sales service business from other dealers of same brand or from organised (branded) franchised service network or from unorganised local garages. 19

21 ANNUAL REPORT & ACCOUNTS Moreover, in the automobile dealer industry, vehicles cannot be kept in the store for long unlike consumer durables, as automobiles lose value with time. The model gets old and the customer would not be willing to pay for it. The damage due to handling, if they are in the showroom or warehouse for too long, is another factor. Other factors like affordability, innovation, infrastructure facilities and price of fuel, stringent emission norms and safety regulations and interest rates affect the demand for automobiles to a larger extent. These factors and challenges always keep the automakers and dealers on their toes. OUTLOOK The financial year sales figures are not enthusing, to say the least, and the auto market may once again face with the prospect of slowdown. Automobile dealer fraternity was banking a lot on the advent of to bring the much needed buoyancy back in the market. Despite offering various schemes, the showroom traffic has come down drastically and enquiry conversions are also not taking place. Customers shying away from the showrooms and whatever footfalls are there in the showrooms are not getting fully converted into sales. The market sentiment continues to remain subdued due to poor economic conditions and various other factors. The issues, such as, depressed economic environment, inflation and high fuel prices & interest rates continue to dog the auto market. The external factors, particularly, slowdown and subdued economic activity in Europe, leading to India s widening trade gap, are not helping either. The long term outlook for the automobile industry is bright and robust, though outlook for the Indian auto industry in near term is expected to remain stable and a muted growth in both passenger vehicles segments is expected due to structural weaknesses and over-capacity among other factors. RISKS AND CONCERNS Indian car industry is one of the most promising car industries across the globe. It has gradually strengthened its foothold in the international area as well. The country is dealing with many car manufacturers, dealers, and associations in various countries including U.S. From some countries, India import cars and car components and to some India exports. With this, global recession is obvious to have its impact on the Indian Car Industry. Though India has witnessed a growing customer base, it has not inoculated them from the global crisis. The crippling liquidity and high interest rates have slowed down the vehicle demand. Rising Input costs of commodities, significant increase in Crude Oil prices, availability of credit and affordable interest rates are important facilitators for automobile sales. The uncertain exchange rates and a sudden increase in dollar value against Indian rupee have contributed to slowdown. Increasing Dollar value has raised the landed cost of imported machine, tools and even raw materials required for production. In addition, rising cost of dealership operations, limited availability of trained and untrained manpower, increasing labour and wage rates, prospects of accelerated career growth and better training & development opportunities have kept the margins of dealership operations under immense pressure. Intensity of competition has increased in almost all the segments of the Indian automotive market due to entry of new players and appointment of new dealers by Maruti. Launch of new models by different players have also increased market competition. This increasing level of competition would also translate into higher selling and distribution costs. The Company is aware of the increasing competition and is taking measures to remain competitive in the market place. SEGMENT WISE BUSINESS PERFORMANCE Competent Automobiles Co. Ltd. is mainly in the business of trading and servicing of Maruti Suzuki vehicles. The Company operates in two segments, namely, Showroom and Services & Spares. The Showroom segment deals with purchase and sales of vehicles manufactured by Maruti Suzuki India Limited. The Service and Spares segment includes servicing of Maruti vehicles and sale of their spare parts. For Segment wise business performance of the Company, please refer to note no. 35 in the notes to financial statement forming part of the annual accounts at page no